Uber Freight goes after larger fleets with dispatcher portal

Digital freight brokerage Uber Freight, a division of Uber Technologies (NYSE: UBER), on August 19 announced the launch of a web-based desktop portal for fleet dispatchers and a redesign of its carrier mobile app.

Prior to the launch of the dispatcher tool, carriers had to manage trucks and loads with Uber Freight’s mobile app. While that works for fleets with less than five trucks — with the dispatcher often doubling as a driver — dispatchers at larger fleets most commonly work from desktop computers.

In the new web portal, dispatchers can view and book loads, assign them to available drivers and manage the loads end to end. Dispatchers designate trucks as “available” and Uber Freight suggests ideal loads for those drivers.

The new dispatcher tool, which will give Uber Freight access to much more capacity beyond its base of owner-operators, makes a lot of sense. The peer-to-peer structure of the Uber ride-sharing platform could only get so much traction in trucking because the population of truly independent owner-operators is much smaller than most people think.

It’s true that fleets of one tractor comprise 60 percent of the total number of fleets, according to a recent FreightWaves estimate contained in our research paper “What are digital freight brokerages worth?” But those single-tractor fleets only represent 8.7 percent of all trucking capacity. Including fleets of two to three tractors gets you another 6.6 percent of the industry. To get exposure to the majority of for-hire capacity, Uber Freight needed to provide a tool that could be used to manage a fleet of around 50 tractors.

“At Uber Freight, we want to be able to serve carriers of all sizes. Whether you’re an owner-operator or a dispatcher at a small or medium-sized fleet, we think there’s value we can provide,” Le said.

Le explained that the dispatcher tool was highly requested by operators who needed a more robust platform than a mobile app to manage their fleets at scale.

While the first release of the dispatcher portal focuses on booking capabilities and giving the dispatchers (and Uber Freight) visibility into the location and status of drivers, Le said that Uber Freight was “not going to stop there.” Future plans include weighing how much more functionality should be built into the Uber Freight carrier platform versus making it seamlessly integrated with a carrier’s existing systems. To me, it sounded like Uber Freight was still deciding whether to build out a full transportation management system (TMS).

We’ve noticed in recent months that the digital freight brokerages are integrating more closely with TMS software in order to source more freight. Uber Freight previously announced a partnership with MercuryGate to give MercuryGate’s shipper customers instant access to Uber Freight’s guaranteed market rates for trucks. In the meantime, Convoy announced a similar partnership with BluJay, another shipper-focused TMS provider.

Until this point, the challenge for digital freight brokerages was getting enough freight to feed their networks. The capacity side of the marketplace could scale rapidly with low-friction downloads of mobile apps, but freight was still won the traditional way, with enterprise salespeople bidding lane by lane. Recent TMS integrations are meant to widen that freight pipeline even further.

Uber’s financial reporting makes it somewhat difficult to calculate Uber Freight’s revenue run rate because the company lumps Uber Freight in with its JUMP scooter/bike offering in “Other Bets” instead of breaking it out separately. At this point, JUMP probably was responsible for a good chunk of the extra $40 million in operating costs recorded by “Other Bets” but probably not much of the bookings.

After a couple of quarters of stagnant growth, “Other Bets” surged to post 153 percent growth in gross bookings, year-over-year, for a total of $182 million. If Uber Freight accounts for 95 percent of “Other Bets,” that translates to a $691.6 million gross revenue run rate.

All this is to say that Uber Freight has sharply accelerated its volumes and needs to find more capacity in larger fleets. To do that, it has to offer more sophisticated tools. Le said that while some carriers are content to use Uber Freight in backhaul situations to find loads that bring them back to favorable markets or established customers, more fleets are beginning to run on dedicated circuits where Uber Freight provides a majority of their loads.

“It really varies how fleets use Uber Freight,” Le said. “If they already have a load into an unpopular area, they may be looking for help to get back to a more dense area, but there are fleets who are more dedicated, with drivers consistently running the same lane over and over again.”

I asked Le if she thought that lower rates and overcapacity made it easier for Uber Freight to onboard carriers.

“I think technology adds value whether it’s a tight or soft market,” Le said. “As the market softens, it becomes more and more critical for fleets to utilize their assets, and we can play a bigger part and find opportunities for them. But we want to understand the needs of the carriers no matter the market conditions.”

John Paul writes about current events and economics, especially politics, finance, and commodities, and holds a Ph.D. in English literature from the University of Michigan. In previous lives John Paul studied Shakespeare in London and Buddhism in India, but now he focuses on transportation and logistics in the heart of Freight Alley--Chattanooga. He spends his free time with his wife and daughter herding cats, collecting books, and walking alongside the Tennessee River.

5 Comments

Most smaller carriers (say <50 trucks) seem to be moving to Ascend TMS as they get live load feeds inside the TMS from about a dozen sources (CH Robinson, DAT, Truckstop.com, Trucker Tools Smart Capacity, Cargo Chief, NextLOAD and a bunch of others). No fleet wants to use a TMS from a single source broker like Uber Freight! We want a TMS that can plug us into loads from every source we usually seek out which means the big guys (CHR, TQL, DAT etc) as well as the smaller brokers and shippers we work with in certain areas a lot. AscendTMS provider that for us and why I think they are winning the TMS race for carriers at the moment.

Uber Freight will never plug into all these other load sources for us and Ascend already does it (as they are independent) and Ascend can run our entire business operations like our loads, our drivers, trucks, trailers, teams, customers, dispatchers, and our terminals at the same time. I don't see Uber Freight providing loads from CH Robinson, TQL, DAT and Truckstop anytime ever lol.

What’s the difference between Uber and all the other brokers out in the market ? Uber was at first saying they would be the first to disrupt the market but as far as I can tell its just another brokerage company coming into the market. I feel the first company to revolutionize and disrupt the industry will be the company that ties in all freight being moved by shippers to the carriers in one market place. Eliminating the need for brokerage companies and the 15-25% of middle money then being either saved or split between carriers and shippers.

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